What is Partnership?
Let’s understand first what a partnership firm is? A partnership firm is a type of business where at least two individuals share ownership of the business. In this type of partnership, the partners share responsibility for managing the company and the revenue the business generates.
If we talk about the types of partnerships, there are three types of partnerships you can consider when you register a partnership firm:
A general partnership is an arrangement by which two or more persons agree to share in all assets, financial and profits and legal liabilities of a business.
In the limited partnership arrangement, the liability is limited to the total amount of their capital investment in the company. Limited Partners are also known as silent partners. In other words, they can make investments in the company but have no power to vote or control over business day to day operations.
Advantages of a limited partnership include:
- Personal asset protection
- Pass-through taxation
- Full oversight
- Investment potential
A joint venture partnership is a temporary partnership that two companies agree to gain mutual benefits by sharing costs, risks, and rewards.
Requirements to register partnership firm:
- There should be a minimum of 2 partners to register partnership firm in India.
- Few legal documents
- There is no minimum capital required to register partnership firm.
The following documents are required to register partnership firm in India:
– The statement in Form 1 with the prescribed fees.
– Notarised True copy of the Partnership Deed stating the following :
- The firm-name
- The nature of business of the firm
- The place of business of the firm
- The date when each partner joined the firm
- Full names and permanent addresses of the partners
- The duration of the firm
– Proof of ownership or rent of the location of your business. (e.g. Electricity Bill, Agreement of Business Place, etc)
– Copy of PAN Card of partners in a partnership
– Copy of Aadhaar Card or Voter identity card
These documents are required when someone register partnership firm in India.
Steps to register partnership firm in India
- First Choose Partnership Firm Name.
- Fillup the Application form with personal and business details.
- Create a Partnership Agreement or Deed.
- Take out the Print of the deed on stamp & get it signed by all the partners with notarization.
- Apply for the PAN & TAN.
- After receiving PAN Card hard copy, follow the next step.
- Apply for the MSME Registration.
- Open Current Bank Account
Benefits of registering a partnership firm in India
– Power to file a case in a Court by a partner against the firm.
– Power to file a case in Court by the firm against third parties.
– Power to claim set-off
When you complete the registration process for the partnership firm then you will need to register gst and if you have already registered and facing issue in filing the gst, you can learn by clicking on the link.